New child maintenance charges will ‘take money from children’

11 August 2014

New charges that begin today (Monday 11 August) for both parents using the government’s new Child Maintenance Service will take vital money from children, warns single parent family charity Gingerbread.

The government has already introduced a £20 application fee for parents who need to use the replacement for the Child Support Agency (CSA) and from today, ongoing charges for both parents who need to use the new system’s collection service will come into force.

The only way that parents can find themselves in the collection service and paying the ongoing charges will be if the paying parent is proven to be a ‘bad payer’ because he or she has failed to pay maintenance voluntarily. If the new Child Maintenance Service (CMS) has to collect child maintenance from the paying parent, they will apply an additional charge of 20 per cent to that parent, which the government will keep. The CMS will then also deduct four per cent from the child’s maintenance before passing the remaining money onto the single parent.

Gingerbread chief executive Fiona Weir said: “The government’s new charges will take money from children. Child maintenance makes a real difference to children’s lives and it is simply wrong for the government to take this money because their other parent has failed to pay when they should.”

On average the collection charges will see affected single parent families losing more than £70 a year [1], equivalent to a term of school dinners. The charges come as new research published by Gingerbread finds that two out of three working single parents are finding their finances a constant struggle at best [2].

Parents can leave the collection service if the paying parent pays on time for a minimum period, and either parent requests to move to direct payments instead.

Only around half (52 per cent) of separated families have a child maintenance agreement in place [3] and Gingerbread is concerned that the charges and impending case closure could mean even fewer children get the financial support they need. The government’s own impact assessment predicts that 100,000 families will stop getting maintenance as a result of the changes [4].

Fiona Weir continued: “It’s really important that parents don’t let the charges put them off getting a child maintenance arrangement in place. Lots of parents can and do sort out maintenance between them, but it’s not always possible, and single parents shouldn’t be put off asking for help when they need it.”

Fewer than 60,000 parents are currently within the new CMS [5], but the government has already started the process of closing existing CSA cases and asking parents to try to come to a private agreement before opening a case with the new service. There are more than 1 million cases [6] within the CSA, all of which will be closed over the next three years. The CMS has been taking on all new child maintenance cases since November last year.

Gingerbread’s website has the very latest on the changes to child maintenance, visit www.gingerbread.org.uk.

ENDS

Notes to editors
[1] The average CSA assessment where there is money due is £34. If this current level of award is translated into the new scheme 4 per cent would equate to a loss of £70.70 per year.
[2] 67 per cent of working single parent surveyed said their finances were a constant struggle at best. Online survey ran between 14 February 2014 and 14 March 2014 with 2,486 single parent respondents in total; respondents were self-selecting but broadly reflected the demographic and income profile of single parents nationally. Paying the Price: The long road to recovery, Gingerbread.
[3] DWP estimates (published 2012), 52% of separated families eligible for CM receive some payment https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223122/Child_Maintenance_Population_Estimates.pdf
[4] Child Maintenance Reforms Impact Assessment, paragraph 122: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/259694/cm-case-closure-and-charges-regs-ia-final.pdf
[5] DWP (2014) Experimental statistics on 2012 scheme administered by the Child Maintenance Service.
[6] In the quarter to March 2014, the 1993/2003 scheme live caseload was 1,394,000. DWP (2014) Child Support Agency